New employer does not have pf account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2013 Hi

I worked for 3 years in an organization and my EPF was being deducted. After that job I have been working with a smaller organization for 2 years which does not have an EPF account as the number of employees are less than 20.

So how can I withdraw my EPF funds, If i withdraw would the withdrawn amount be taxable? I have completed 5 years if service but out of that have paid pf for only 3 years.

If it would be taxable so what are the rules through which I will be eligible for withdrawal without tax?

I would really appreciate an early help on the same...

Santosh Mishra

Santosh Mishra (Expert)
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17 March 2013 And the first instance it taxable as under:

Employee’s Contribution- Exempt from Tax

Interest on employee’s contribution – Taxable under the head Income from other sources.

Employer’ s contribution and interest thereon- Taxable as Profits in lieu of Salary.

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8. Exclusion from total income of accumulated balance.- The accumulated balance due and becoming payable to an employee participating in a recognised provident fund shall be excluded from the computation of his total income—

(i) if he has rendered continuous service with his employer for a period of five years or more, or

(ii) if, though he has not rendered such continuous service, the service has been terminated by reason of the employee’s ill-health, or by the contraction or discontinuance of the employer’s business or other cause beyond the control of the employee.

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You are not able to continue your PF membership as your current Employer is not registered with PF authority, you can take shelter of term " Other cause beyond the control of employee" and can consider the amount as tax free. But this would be an aggresive view and you may require to justify it to assessing officer.

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